(Expressed in United States dollars except where otherwise indicated)
TORONTO, April 19 /CNW/ - GobiMin Inc. (the "Company" or "GobiMin")
reports its financial and operating results of 2010 and is pleased to
announce the declaration of an annual dividend of $0.01 (CAD$0.01) per
The audited consolidated financial statements along with management's
discussion and analysis will be filed with SEDAR (www.sedar.com) and will also be available at the website of the Company (www.gobimin.com).
Year ended December 31,
Gain on deregistration/disposal of subsidiaries (1)
Net (losses)/earnings (1)
Basic (losses)/earnings per share
Diluted (losses)/earnings per share
(LBITDA)/EBITDA per share(2)
Cash and cash equivalents and time deposit
Cash and cash equivalents and time deposit per share(2)
Annual dividend per share (3)
Special dividend per share(3)
Net losses for the year 2010 take in account the deregistration of 4
subsidiaries. The net earnings for the year 2009 comprised also the gain on the disposal of the 2 operating subsidiaries in
As non-GAAP measurements, (LBITDA)/EBITDA, (LBITDA)/EBITDA per share,
working capital and Cash and cash equivalents and time deposit per
share do not comply with GAAP and, therefore, the amounts presented in
the above table may not be comparable to similar data presented by
other companies. The data is intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP.
The Company declared an annual dividend of $0.01 (CAD0.01) per share for
2010 in accordance with its dividend policy. For 2009, the Company paid
an annual dividend of $0.0125 (CAD0.0125) per share based on 2009
annual performance. For 2008, the Company paid an annual dividend of
$0.01 (CAD0.01) per share pursuant to its dividend policy and a special
dividend of$0.06 (CAD0.07) per share following the disposal of the 2
operating subsidiaries in China.
On April 19, 2011, the Company declared an annual dividend of
$0.01(CAD0.01) per share in accordance with the Company's dividend
policy. The dividend is payable on May 25, 2011 to shareholders of
record on May 12, 2011.
Business Summary and Development
(a) Gold Project in Xinjiang
The Company, through a wholly owned subsidiary, entered into an
agreement with Xinjiang Baodi Mining Company ("Baodi") and a subsidiary
of Brigade No. 2 of Xinjiang Bureau of Geology and Mineral Resources
("Brigade No. 2") to form a joint venture company, Xinjiang Tongyuan
Minerals Ltd. ("Tongyuan"), in China to develop and operate the
Sawayaerdun Gold Project in Xinjiang, China. GobiMin owns a 70% equity
interest in Tongyuan while Baodi and Brigade No. 2 each own a 15%
interest. Tongyuan has obtained the related mining license.
The main exploration works carried out this year include 33 drill holes
with a total length of about 6,700 m and 33 trenches of approximately
1,350 m in the Zone IV, mostly in the northeastern portion of the
zone. The Company has received a NI 43-101 technical report from
Wardrop a Tetra Tech Company in March 2011 for the gold resources
contained in the Zone IV within the Project, which can be viewed at www.sedar.com. At a lower grade threshold of 0.5 grams/tonne gold, Zone IV is
estimated to contain Indicated resources of about 34 million tonnes
with an average grade of 1.3 grams/tonne gold (about 1,380,000 oz gold)
and Inferred resources of about 13.5 million tonnes with an average
grade of approximately 1.0 grams/tonne gold (about 424,800 oz gold).
In March 2011, there was a casualty reported at the site of the Gold
Project due to an avalanche. The Company has extended its sincere
condolences and set aside an amount of compensation for the family of
the deceased despite the fact that its responsibility was not engaged.
In order to avoid accidents in the future development and operation
stages, the management has laid down additional stringent safety rules
that should be followed by all staff at the site.
(b) Coal Project in Xinjiang
On February 9, 2010, GobiMin acquired an indirect equity interest of
24.49% in the Balikun Coal Project in Xinjiang, China and participates
in its management and operations. GobiMin and its partner jointly have
a controlling interest in the project through Xinjiang Ruide Mining
Limited. According to a NI 43-101 Mineral Resource estimate prepared by
Scott Wilson Ltd. in February 2010, the Balikun Coal Project hosts 38
million tonnes of coal in Measured Resources and 50 million tonnes in
Indicated Resources. The power and water supply facilities have been
installed and are in operation. The construction of a ventilation ramp
with total length of 1,328 meters (2010 finished 568 meters) has been
completed while the main ramp and an auxiliary ramp are approximately
30% and 40% completed respectively. Other achievements in 2010 include
securing the sources of water, heating supply facilities, road for
transportation and drainage system for underground construction and
(c) Silver Operations
GobiMin holds an equity interest of 49% in China Precision which engages
predominantly in silver trading. China Precision buys physical silver
ingots from producers and sells them directly to end consumers. All its
positions are hedged and it is not exposed to market price movements.
In order to increase the vertical spectrum of the silver business,
China Precision has developed a downstream silver business by
establishing a small processing workshop in Hong Kong for transforming
the silver into more variety of product forms and sell to the
industrial customers. To increase product variety and profit
contribution, GobiMin will continue to source and explore new potential
business opportunities in this sector.
(d) Base Metals Exploration Projects in Xinjiang
GobiMin currently owns equity interests in 4 exploration joint ventures
in Xinjiang, China for nickel, copper, gold, lead and zinc. During
2010, GobiMin has been exploring several copper projects which show
good indications of copper mineralization. Some exploration licenses
were relinquished by not applying for renewal or sold to third parties
due to not having good prospect. The Company will continue to conduct
pre-survey and exploration to identify potential mineralization.
GobiMin formerly owned a 40% indirect equity interest in another joint
venture, Xinjiang Tongxing Minerals Limited ("Tongxing"), which is
engaged in exploration and development of the Yanxi Copper Property.
The Company entered into a Share Transfer Agreement on July 14, 2010
regarding the disposal of a company holding an 80% equity interest in
Tongxing, among which, the Company disposed of its 32% interest in
Tongxing. The transaction was completed on July 22, 2010 and GobiMin
has received all the cash consideration and the first lot of
convertible bonds. GobiMin currently retains an 8% indirect unlisted
equity interest in the Yanxi Copper Property.
The Company has entered into a supplemental agreement with the buyer on
December 30, 2010 to extend the deadline for obtaining the mining
license of the Yanxi Copper Property (the "Yanxi Mining Licence") from
December 31, 2010 to August 31, 2011. According to the supplemental
agreement, the consideration to be received upon obtaining the Yanxi
Mining Licence is reduced by HK$21,000,000 to HK$259,000,000 due to the
construction of a railway across the Yanxi Copper Property that has a
negative impact on the minable quantity. The final and total
consideration for the disposal of the 80% indirect equity interest in
Tongxing will accordingly be capped to HK$365,000,000. Based on the
reduced consideration of $33.4 million (HK$259,000,000), the Company
shall have an estimated deferred gain of $5.7 million for its disposal
of the 32% equity interest in Tongxing, netting off the amount payable
for the mining license fee, tax, stamp duty and related payments of
(e) Investment Opportunities
The Company ceased to have its substantial mining operations in Hami,
Xinjiang of China following the disposal of two operating subsidiaries
in February 2009. Given its healthy cash position, the Company will
keep on searching for potential investment opportunities.
(f) Normal Course Issuer Bid
On January 26, 2010, GobiMin has renewed its normal course issuer bid to
repurchase up to an additional 3,412,865 common shares over a maximum
period of 12 months ended January 31, 2011. The Company repurchased
3,412,865 common shares during the year. All shares repurchased were
returned to treasury for cancellation. GobiMin has 65,890,837 shares
outstanding as at December 31, 2010.
On January 4, 2011, GobiMin announced to renew its normal course issuer
bid to repurchase up to an additional 3,294,541 common shares for a
further one year. The normal course issuer bid will expire on January
31, 2012. Up to April 19, 2011, a total of 1,700,000 common shares were
repurchased at an aggregate cost of $1,317,613 (CAD1,411,560).
All shares repurchased will be returned to treasury for cancellation. A
copy of the related Notice of Intention to Make a Normal Course Issuer
Bid shall be provided to shareholders upon receipt of written request
to the Company at its registered office.
Chief Financial Officer ("CFO")
Ms. Joyce Ko has been the Interim Chief Financial Officer of GobiMin
since May 2009 and is now formally appointed as CFO. Joyce also
occupies the function of the Vice President Corporate Affairs and
Secretary of the Company.
GobiMin continues to move forward with a healthy cash position.
The mining license of Yanxi Copper Property is expected to be obtained
in 2011. We plan to carry out the drilling work and the resource
estimate of the New Area adjacent to the Yanxi Copper Property. As the
Company will be entitled to an additional consideration based on the
resource estimate of the New Area, we will make every possible effort
to explore the New Area to ensure that the Company can increase the
total amount of consideration to be received.
The recently announced NI 43-101 resource estimate of Sawayaerdun Gold
Project delivered impressive results of Zone IV. GobiMin will carry out
a more comprehensive survey of Zone IV based on the existing geological
information. We believe that the areas surrounding Zone IV also have
good resources potential and will bring good news to shareholders once
the exploration unfolds.
During the coming year, GobiMin will seek to increase the vertical and
horizontal diversity of its metals trading business. Besides
transforming silver into a larger variety of product forms, our small
processing workshop in Hong Kong will start refining silver. In
addition to silver trading, the Company will also engage in trading
other kinds of metals. GobiMin will continue to source and explore new
potential business opportunities in China and overseas.
Certain statements contained in this press release constitute
forward-looking information. Such statements are based on the current
expectations of management of GobiMin. You are cautioned that such
statements are subject to a multitude of risks and uncertainties that
could cause actual results, future circumstances or events to differ
materially from those projected in the forward-looking information.
The reader should not place undue reliance on the forward-looking
information included in this press release given that (i) actual
results could differ materially from a conclusion, forecast or
projection in the forward-looking information, and (ii) certain
material factors or assumptions were applied in drawing a conclusion or
making a forecast or projection as reflected in the forward-looking
information could prove to be inaccurate. These statements speak only
as of the date they are made, and GobiMin assumes no obligation to
revise such statements as a result of any event, circumstance or
otherwise, except in accordance with law.
"Neither TSX Venture Exchange nor the Investment Industry Regulatory
Organization of Canada accepts responsibility for the adequacy or
accuracy of this release."
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SOURCE GobiMin Inc.
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